Cebu insurers target 40% increase in gross premium
Due to the promising business environment and robust economic activities in the whole of
The incoming president of the Cebu Insurers Club, Incorporated Rolando “Andy” L. Manatad expressed in an exclusive interview that this year upon his oath for office, the association is targeting to achieve about 30% to 40% increase in their total premium for
Manatad said that yearly, the whole industry generates a total gross collection of P70 billion to P80 billion premium for the non-life segment as this does not need so much marketing efforts as most products are required by the government.
Non-life insurance is categorized under fire, casualty and marine. Manatad said that this segment has a very big market compared to life insurance as it has a broad coverage that is mostly required for different transactions.
He said that this year they were able to significantly increase their gross premium to 20%, which proves that despite hardships in the economy the industry was still able to maintain its growth.
He discussed that as whole, the industry has performed quite well despite several issues and debates concerning the previous Insurance Commissioner Evangeline Escobillo.
Manatad pointed out that one major leap that the industry has succeeded so far is ousting Escobillo who has not performed for the best interest of the players and the industry sector.
Manatad said that after the ousting of Escobillo, the P50 million to P100 million implemented paid-up capital for non-life insurance providers which made way for the closures and of small insurance companies last year that were not able to reach the required minimum has already been reduced which unburdened the sector.
“In 2007, we are proud to say that we have done well and so far this year we have started to accomplish changes that have exposed the industry to the different sectors of society, which is an important step towards growth,” said Manatad.
Manatad discussed that so far the industry is seeking for the government sector to sponsor a bill or a resolution that can abolish VAT and the oil deregulation law as these factors has been hindering the growth of the industry as their insurers have started to reduce their coverage to cope.
Manatad revealed that some of their clients have reduced their coverage; from 100% it has been decreased to 50% and this could be accounted for the economic problems such as oil price increase and the high VAT.
“Reduced coverage also means reduced premium for us. The industry has been very much affected by our economic problems like the strong peso, the oil increase and the value added tax (VAT),” he pointed out.
So far, the huge bulk of the non-life insurance market is comprised of property insurance that composes 50% of the whole, followed by the maritime industry which takes up 25% and the rest is distributed to Third Party Liability insurance among others. Fire insurance according to Manatad is the emerging market this year.
“Insurance is the primary concern of the society because it is one of the primary drivers of the economy. Hopefully this year we will be able to materialize all our projects and programs so that we will be able to achieve the projected growth of 30% - 40%,” he underscored. —Rhia de Pablo
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